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Washington Watch - May 6, 2009


Consumer Credit Card Protections Bill Passes House, Heads To Senate

Millions of the nation’s credit cardholders could soon be seeing some changes in their credit card statements. In a bipartisan vote, the U.S. House of Representatives has approved the Credit Cardholders’ Bill of Rights (H.R. 627) which puts tough restrictions on rate increases and double-cycle billing. It also requires that companies notify consumers 45 days before a rate increase and explain at that time how the change will affect an existing balance.

“This is one more step in our efforts to assist responsible, hardworking Americans who should not be subjected to these practices at any time, much less during a recession,” said House Majority Leader Steny H. Hoyer (MD). “As we work to protect consumers, I look forward to working with the Senate to get this legislation to the President’s desk for a signature as soon as possible.”

The measure is set to be debated in the Senate this week, where a stricter version drastically restricts the ability of card companies to raise rates on late-payers or those with shaky credit histories. At the request of the White House, the following measures – which are already included in the Senate bill – were included in the House legislation:

  • Requirement that payments must first be applied to the debt with the highest interest rate;
  • Mandatory annual review by the Federal Reserve to assess the effects of the bill on interest rates, annual fees and denial of new credit cards;
  • On each bill, companies must disclose the long-term costs of paying only the minimum balance;
  • Promotional rates on new cards must be valid for a minimum of six months;
  • Terms of the credit card agreement are to be posted on the card issuer’s Web site.
The National Association for the Self-Employed (NASE) commends the House of Representatives on the passage of this important consumer protections bill. Unfortunately, the self-employed and micro-business owners who use small-business credit cards are not shielded in the House-passed legislation. It is the hope of the NASE that language will be included in the Senate version to extend these safeguards.

The Government Accountability Office (GAO) reported that one-fifth of those carrying credit card debt pay an interest rate above 20 percent. Citing a 25 percent rise in consumer credit debt since 1998, the Federal Reserve announced its support for similar legislation last year.

 


Senate Confirms Sebelius as HHS Secretary

As conversations on swine flu and health care reform heat up, the final vacancy in Present Obama's Cabinet, the secretary for the Department of Health and Human Services (HHS), has been filled. The Senate voted to confirm Kansas Gov. Kathleen Sebelius, President Obama's second nominee for the position; the President's first nominee, former Senate Majority Leader Tom Daschle (D-S.D.) withdrew his nomination after a number of unresolved tax issues with the I.R.S. surfaced.

Sebelius will lead the department responsible for the government's largest health programs, including Medicare and Medicaid, and control a budget of over $600 billion. Perhaps the biggest responsibility for Sebelius this year will be to work with Nancy-Ann DeParle, director of President Obama's Office of Health Reform, to overhaul the nation's health care system, a project for which his budget set aside $634 billion over 10 years.

Access to quality, affordable health care is a top legislative priority for the National Association for the Self-Employed (NASE). According to a 2008 survey on health care reform, nearly 85 percent of micro-business owners support a system that provides coverage for all Americans. However, respondents differ on the structure of that system; nearly 23 percent prefer the current system, 25.4 percent support a government-run system requiring every American to purchase coverage, and 24.5 percent favor a government-run system paid for through taxes.

Sebelius was confirmed by the full Senate by a vote of 65-31. Some Republicans, however, expressed concerns about Sebelius' strong support for abortion rights and her support for the administration's policy of comparative effectiveness research.

Senators of both parties overlooked errors on Sebelius' 2005 and 2007 tax returns and some underreported campaign contributions now that she has corrected both issues. Sebelius has been governor of Kansas since 2002, and was the state's insurance commissioner for eight years before becoming governor.

Read more about the NASE's advocacy efforts concerning affordable coverage for micro-businesses and their families here.

 


Quick Look: The Budget
The Obama Administration’s $3.56 trillion budget was approved by Congress in the past several days, with Republicans not casting a single favorable vote. The resolution contains language that would immunize the president’s health care overhaul to a Senate filibuster. The passage continued to raise concerns about the size of the national debt, which would balloon to $11.5 trillion in 2014.

 


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